Current Affairs 07 August 2024

CONTENTS

1. World Development Report 2024: The Middle Income Trap
2. Political Turbulence in Bangladesh Leads to Uncertainty in India-Bangladesh Relations
3. Srinagar Joins the Prestigious World Craft Cities List
4. Miombo forest
5. GAIN Report Advocates for Nutritional Investments in Agri-Food Sector
6. Indian Siris
7. Legionnaires’ disease

World Development Report 2024: The Middle Income Trap

Context:

A recent World Bank report titled “World Development Report 2024: The Middle Income Trap” has highlighted significant challenges faced by over 100 countries, including India, in achieving high-income status in the coming decades.

Relevance:

GS III: Indian Economy

Dimensions of the Article:

1. Key Insights from World Development Report 2024
2. Strategic Recommendations and Policy Focus
3. Middle Income Trap
4. Challenges for India to Attain High-Income Status
5. Strategic Blueprint for Elevating India’s Economy

Key Insights from World Development Report 2024

Economic Status and Transition Challenges

• Middle-Income Trap: India, along with 100 other countries including China, is at risk of falling into the middle-income trap, struggling to progress from middle-income to high-income status.
• Current Economic Dynamics: While India benefits from positive demographic trends and digital advancements, it faces increased external challenges compared to previous decades.

Transition to High-Income Status

• Historical Transitions: Since 1990, only 34 middle-income economies have successfully transitioned to high-income status, often influenced by unique factors like integration into the European Union or significant oil reserves.
• Investment and Growth: Traditional growth strategies reliant on increasing investment and saving rates are deemed insufficient for sustained economic growth. These strategies must also tackle productivity issues and go beyond mere physical capital accumulation.

Global Impact and Demographics

• Global Contribution: Middle-income countries, housing six billion people (75% of the global population), contribute over 40% of the global Gross Domestic Product (GDP).
• Projected Outcomes: Without substantial changes in current economic strategies, these countries may fail to achieve prosperous societies by mid-century due to various challenges including aging populations, rising debt levels, and environmental concerns.

Strategic Recommendations and Policy Focus

3i Strategy:

The report advocates a three-phase strategy for economic advancement:

• 1i Phase: Focuses on bolstering investment in low-income countries.
• 2i Phase: Encourages investment and the infusion of foreign technologies in lower-middle-income countries.
• 3i Phase: Aims at investment, infusion, and innovation in upper-middle-income countries, exemplified by South Korea’s growth from a per capita income of USD 1,200 in 1960 to USD 33,000 by 2023.

Policy Directions:

• The report stresses the need for comprehensive strategies that enhance overall economic performance rather than isolated sectoral focus.
• It emphasizes the importance of enhancing education and skills, fostering connections between universities and industries for better technology transfer, and creating policies that support the growth and dynamism of firms, particularly microenterprises.

Middle Income Trap

• Concept Overview: The middle-income trap occurs when countries achieve a certain economic level but fail to progress to a higher income status. This often happens when the initial fast-paced economic growth stalls, leaving the nation stuck without further advancements to wealthier echelons.
• Economic Dynamics: The World Bank defines this trap as the stagnation experienced when GDP per capita is around 10% that of the United States, typically around $8,000. Countries at this stage often struggle with depleted initial growth drivers, systemic weaknesses, and limited innovation.
• Global Context: As of late 2023, there are 108 middle-income countries, which house three-quarters of the world’s population and produce over 40% of its GDP. These nations are significant contributors to global carbon emissions, indicating their substantial impact on both the economy and environment.

India’s Stagnation at the Middle-Income Level

• Historical Perspective: Until 2006, India was categorized by the World Bank as a low-income country. It moved to the lower-middle income category in 2007, where it has largely remained, with growth concentrated in the hands of the top 100 million of its populace—a model potentially unsustainable.
• Income and Growth Stats: India battles with a sluggish growth rate at this income level, with per capita figures oscillating between $1,000 and $3,800.

Challenges for India to Attain High-Income Status

• Inequality and Development: India wrestles with significant consumption inequality, indicated by a Gini index of around 35 for the past two decades, hampering uniform economic growth and comprehensive development.
• Poverty Trends: Notable progress in poverty reduction was made from 2011 to 2019. However, this trend has decelerated, particularly after the COVID-19 pandemic, pointing to persistent economic disparities.
• Economic Policies: Managing inflation through higher interest rates is a strategy to temper demand and stabilize economic growth, alongside strategic fiscal management essential for nurturing a growth-supportive environment without stoking inflation.
• Income Goals: To elevate to a high-income status, substantial increases in per capita income are needed. Despite projections of hitting a $7 trillion economy by FY31, maintaining a steady 6.7% growth rate is critical for achieving this target.

Strategic Initiatives and Economic Aspirations

• Job Market and Economic Productivity: Improvement in employment quality and women’s participation in the workforce remains pivotal. India needs to create approximately 78.5 lakh non-farm jobs annually until 2030 to accommodate its growing labor force.
• Sectoral Diversification and Sustainability: Ensuring economic diversification beyond traditional sectors like mining and manufacturing and enhancing global competitiveness are vital. Furthermore, aligning its economic aspirations with environmental goals, India aims for net-zero emissions by 2070, underlining the necessity to integrate sustainable practices within its growth strategy.

Strategic Blueprint for Elevating India’s Economy

• Fostering Equitable Growth:
  • Enhance wealth distribution through smarter taxation and robust social safety nets, ensuring that prosperity reaches all corners of society.
• Diversifying the Economic Landscape:
  • Invest in emerging sectors like technology and renewable energy while boosting local manufacturing through incentives like PLI schemes. This approach helps make goods more affordable and nurtures innovation.
• Empowering Local Communities:
  • Develop economically lagging regions by tapping into local skills and promoting regional manufacturing, which aids in reducing disparities and unemployment.
• Strengthening Foundations:
  • Prioritize comprehensive education reforms to align with industry demands and enhance vocational training. Simultaneously, ensure affordable access to essential services like healthcare and education to support a healthy, well-educated workforce.
• Improving Governance and Infrastructure:
  • Increase transparency and efficiency in economic institutions to curb corruption. Streamline regulations to attract investments and facilitate business operations.
• Aligning with Global Standards:
  • Integrate environmental sustainability goals into development strategies, invest in green technologies, and prepare for climate impacts to build resilience in vulnerable sectors.
• Enhancing Financial and Digital Inclusion:
  • Broaden access to financial services and leverage digital platforms to improve transaction efficiency, helping small businesses and underserved populations thrive.

-Source: The Hindu

Political Turbulence in Bangladesh Leads to Uncertainty in India-Bangladesh Relations

Context:

Following the resignation of Bangladesh Prime Minister Sheikh Hasina after weeks of violent protests, India’s relationship with Bangladesh has potentially entered a period of uncertainty. In response to the political upheaval, the Army Chief in Bangladesh has announced the establishment of an interim government to govern the country during this transitional phase. This development could have significant implications for bilateral relations and regional stability.

Relevance:

GS II: International Relation

Dimensions of the Article:

1. Bangladesh’s Political Evolution and Bilateral Ties with India
2. India-Bangladesh Bilateral Relations
3. Points of Tensions Between India and Bangladesh
4. Way Forward

Bangladesh’s Political Evolution and Bilateral Ties with India

Political Landscape of Bangladesh

• Founding Era: Bangladesh, established in 1971, saw its first Prime Minister as Sheikh Mujibur Rahman from the Awami League. His leadership ended tragically with his assassination in 1975.
• Military Influence (1975-1990):
  • Initiated with Chief Justice Abu Sadat Mohammad Sayem taking over as president, followed by military control.
  • General Ziaur Rahman served as president from 1977 until his assassination in 1981, succeeded by Abdus Sattar who was later overthrown in 1982 by Army Chief H M Ershad. Ershad resigned in 1990 amidst widespread unrest.
• Civil Governance:
  • Leaders like Khaleda Zia and Sheikh Hasina, Mujibur Rahman’s daughter, alternated in power, facing political unrest and coups, notably in 1996 and leading to military-influenced governance till 2008.
• Restoration and Stability Post-2008:
  • Sheikh Hasina regained control, stabilizing governance by reducing military influence and promoting secular principles established by the Supreme Court in 2010.

India-Bangladesh Bilateral Relations

• Historical and Cultural Bonds:
  • The relationship dates back to the 1971 Bangladesh Liberation War, with India providing vital support for Bangladesh’s independence from Pakistan.
• Challenges and Resolutions:
  • Post-independence, relations experienced strains over boundary disputes and water-sharing issues, significantly improving with the Ganga Water Sharing Treaty initiated during Sheikh Hasina’s term from 1996.
• Economic and Trade Dynamics:
  • India is a major trade partner, with bilateral trade reaching $12.9 billion. However, recent times saw a contraction in exports by 9.5% to $11 billion.
  • A Comprehensive Economic Partnership Agreement is under discussion to accommodate Bangladesh’s upcoming transition out of LDC status by 2026.
• Energy and Infrastructure Collaboration:
  • Bangladesh imports significant electricity from India and participates in major projects like the Maitree Super Thermal Power Plant and the India-Bangladesh Friendship Pipeline.
  • India has provided four lines of credit, summing up to USD 8 billion, primarily for infrastructure enhancements.
• Cultural and Humanitarian Exchanges:
  • Cultural interactions are supported through entities like the Indira Gandhi Cultural Centre in Dhaka, promoting people-to-people contacts and fostering relations between the youth of both nations.

Points of Tensions Between India and Bangladesh

• River Water Sharing:
  • Despite sharing 54 common rivers, only two treaties (Ganga Waters Treaty and Kushiyara River Treaty) have been signed, leaving issues concerning major rivers like Teesta and Feni unresolved.
• Illegal Migration:
  • The persistent issue of illegal migration from Bangladesh to India, including refugees and economic migrants, creates strain in Indian border states, impacting resources and security.
• Rohingya Crisis:
  • Rohingya refugees entering India through Bangladesh pose a challenge, leading to concerns over resources and security in Indian border states. The National Register of Citizens (NRC) in India has raised apprehensions in Bangladesh.
• Cross-Border Issues:
  • Incidents of cross-border drug smuggling, human trafficking, and poaching of animal and bird species are significant challenges.
• Belt and Road Initiative (BRI):
  • Bangladesh’s active participation in China’s Belt and Road Initiative, while India abstains, creates a potential source of tension as China’s influence in the region could affect India’s strategic standing.

Way Forward:

• Establish joint task forces with law enforcement agencies from both countries to combat cross-border drug smuggling and human trafficking effectively.
• Promote shared intelligence and coordinated operations to disrupt illegal networks operating across borders.
• Implement smart border management solutions utilizing Artificial Intelligence (AI) and data analytics to streamline cross-border movements, ensuring both security and efficiency.
• Establish a digital connectivity corridor focusing on high-speed internet connectivity, digital services, and e-commerce to create new avenues for trade, collaboration, and technological exchange between India and Bangladesh.

-Source: Indian Express

Srinagar Joins the Prestigious World Craft Cities List

Context:

Srinagar has been recognized for its rich craft traditions and added to the World Craft Cities list by the World Crafts Council (WCC), making it the fourth Indian city to gain this distinction. Alongside Srinagar, Jaipur, Malappuram, and Mysore are the other Indian cities featured on this list, which includes a total of 60 cities globally. This acknowledgment celebrates the vibrant and diverse artisanal heritage preserved and promoted in these cities.

Relevance:

GS I: History

Dimensions of the Article:

1. Overview of Srinagar’s Craft Heritage
2. UNESCO Recognition and Global Craft Contributions

Overview of Srinagar’s Craft Heritage

• Srinagar has been a vibrant center for arts, crafts, and trade for approximately 1,500 years, historically serving as a crucial node on the ancient Silk Route.
• The region is famed for its diverse array of crafts, including Paper-Machie, walnut wood carving, various carpet styles, Sozni embroidery, and the luxurious Pashmina and Kani shawls.
• Srinagar is celebrated worldwide for its ‘Cashmere’ brand and the distinctive paisley motif.
• Crafts like Zanjan and Filigree, introduced by Iranian artisans centuries ago, highlight the cultural exchanges that have enriched local craftsmanship.
• The tradition of carpet weaving in Srinagar was revitalized in the late 14th century by Sufi Saint Sayyid Ali Hamdani.

UNESCO Recognition and Global Craft Contributions

• In 2021, Srinagar was honored as a UNESCO Creative City for its significant contributions to crafts and folk arts.
• Launched in 2014 by the World Crafts Council AISBL, this program recognizes cities that make significant contributions to the craft sector globally.

Pioneers and Innovations

• Foundational Leadership: Smt Kamaladevi Chattopadhyay, a founding member of the WCC-International in 1964, played a pivotal role in the craft movement both globally and within India.
• Craft Council of India: Established by Smt Kamaladevi Chattopadhyay in 1964, the council aims to safeguard and promote Indian crafts.

Geographical Indications and Craft Preservation

• GI Certification: Key crafts from Kashmir, including the Kani Shawl, Pashmina, Sozni, Paper-Machie, Walnut Wood Carving, Khatamband, and Hand Knotted Carpets, have been recognized with Geographical Indication certifications, underscoring their uniqueness and cultural importance.

-Source: The Hindu

Miombo forest

Context:

Recently, the United Nations Food and Agriculture Organization (FAO) and the Italian Agency for Development Cooperation (AICS) have signed two agreements for the implementation of projects aimed at protecting the miombo forest.

Relevance:

Facts for Prelims

Miombo Forests

• Biome Characteristics: The Miombo forest spans a significant portion of southern Africa, including nations like Angola, DRC, Malawi, Mozambique, Tanzania, Zambia, and Zimbabwe. This biome is marked by its tropical and subtropical landscapes that consist of grasslands, bushlands, and savannahs.
• Ecological Significance: This forest type covers approximately 2.7 million square kilometers and is critical for the ecological stability of the region. The predominant tree species are Brachystegia, often found alongside Julbernardia and Isoberlinia, which are indicative of the forest’s unique vegetation.
• Hydrological Importance: The Miombo woodlands play a crucial role in maintaining the hydrological integrity of the Greater Zambezi River basin, a key transnational waterway essential for the region’s biodiversity and human activities.
• Socioeconomic Impact: These forests are not just ecological treasures but also support millions of people living in rural settings across several countries. They facilitate local trade, especially in border areas between Mozambique and Zimbabwe, and provide essential resources like firewood, food, and water, underscoring their importance in the daily survival and economic stability of numerous communities.

Food and Agriculture Organization (FAO):

• FAO is a specialized agency of the United Nations focused on leading international efforts to eliminate hunger.
• World Food Day, celebrated annually on October 16th, marks the founding anniversary of FAO in 1945.
• Headquartered in Rome, Italy, FAO collaborates with sister organizations, including the World Food Programme and the International Fund for Agricultural Development (IFAD).

Initiatives Taken:

• Globally Important Agricultural Heritage Systems (GIAHS): Recognizes and promotes agricultural systems contributing to biodiversity conservation and sustainable livelihoods.
• Desert Locust Monitoring: Monitors the global situation of Desert Locust to address potential threats to crops.
• Codex Alimentarius Commission (CAC): Responsible for implementing the Joint FAO/WHO Food Standards Programme.
• International Treaty on Plant Genetic Resources: Adopted in 2001 to ensure conservation and sustainable use of plant genetic resources for food and agriculture.

Flagship Publications:

• The State of World Fisheries and Aquaculture (SOFIA).
• The State of the World’s Forests (SOFO).
• The State of Food Security and Nutrition in the World (SOFI).
• The State of Food and Agriculture (SOFA).
• The State of Agricultural Commodity Markets (SOCO).

-Source: Down To Earth

GAIN Report Advocates for Nutritional Investments in Agri-Food Sector

Context:

The Global Alliance for Improved Nutrition (GAIN) has released a report advocating for increased nutritional investments in the agri-food sector. According to the report, such investments are crucial not only for enhancing business resilience and productivity but also for reducing gender inequalities within the sector. GAIN’s findings highlight the multifaceted benefits that targeted nutritional initiatives can offer to the agricultural industry and its workforce.

Relevance:

Facts for Prelims

Global Alliance for Improved Nutrition (GAIN)

• Foundation Overview: Established in 2002 at a United Nations initiative, GAIN is a Swiss-based foundation dedicated to combating malnutrition worldwide. It operates globally, with its main office in Geneva, Switzerland.
• Mission and Impact: GAIN’s mission is to make nutritious and safe food more accessible, especially for vulnerable populations, enhancing overall health outcomes. Their work includes forming public-private partnerships to facilitate the distribution of nutritious food where it’s needed most.
• Strategic Actions: GAIN collaborates with various sectors, including governments, businesses, and civil society, to foster healthier food environments. They focus on key areas such as improving maternal and infant health, promoting breastfeeding, and providing specialized nutritional products for young children.
• Local and Global Initiatives: The organization also works to enhance food quality along agricultural value chains by partnering with local enterprises. GAIN’s efforts have expanded to assist approximately 667 million people across more than 30 countries, demonstrating a significant global impact on nutrition security.

-Source: Down To Earth

Indian Siris

Context:

A pall of gloom descended on Kumaradevam gram panchayat, located in the East Godavari district, after the death of the century-old Indian siris tree.

Relevance:

GS III: Environment and Ecology

Indian Siris Tree (Albizia lebbeck)

• Native to India and Southeast Asia, the Indian Siris, or Albizia lebbeck, thrives in warm, humid climates. It adapts well to various soil types such as clay, loam, and sandy soils.

Key Characteristics

• Structure: The tree reaches heights between 15-20 meters and features a broad, umbrella-like canopy. It has a notably straight trunk, up to 1 meter in diameter.
• Foliage and Blooms: Leaves are green, fern-like, extending up to 25 cm, contributing to its dense and spreading branches. It blooms with clusters of small, white, fragrant flowers.

Ecological Contributions

• Indian Siris plays a crucial role in enriching soil fertility by fixing atmospheric nitrogen, thus supporting surrounding plant life.
•  Its extensive, shallow root system is excellent for soil binding, making it an effective tool against soil erosion and aiding in land conservation efforts.

-Source: The Hindu

Legionnaires’ disease

Context:

Victoria records 71 legionnaires’ disease cases and outbreak’s first death as search for source narrows.

Relevance:

Facts for Prelims

Legionnaires’ Disease

• Legionnaires’ disease is triggered by the Legionella bacteria, found naturally in freshwater environments like lakes and hot springs.
• This condition is a severe type of pneumonia caused by the legionella bacterium, leading to significant lung inflammation.
• Although naturally found in open water sources, Legionella can thrive in man-made water systems like tanks and plumbing systems.
• People contract Legionnaires’ disease by inhaling mist or aerosols from water sources contaminated with the bacteria, not through person-to-person contact.
• Individuals infected with Legionnaires’ disease typically experience fever, chills, headaches, a general feeling of unwellness (malaise), and muscle pains.
• While treatments for Legionnaires’ disease are available, primarily involving antibiotics, there is currently no vaccine to prevent the infection.

-Source: The Hindu